Whether a small startup or an enterprise-level industry giant, employers all need a few of the same basics when it comes to payroll and human capital management (HCM) and every single one of them stands to benefit from cloud-based HCM software and services. Some just don’t know it yet, but HCM technology market trends assure they will soon.
In Deloitte’s 2018 Payroll Operations Survey, 91 percent of responding small businesses (those with fewer than 1,000 employees) used some sort of online payroll and HCM self-service, while 98 percent to 100 percent of employers in every other size category offered them. That may not sound like a big difference until you consider the sheer numbers. According to the US Small Business Administration, small businesses numbered upward of 30.2 million nationwide, employing some 58.9 million people. Clearly, that nine percent of small businesses not yet offering online payroll and HCM self-services represents a vast potential client market.
“Large, enterprise-level employers, those with 10,000-plus workers, have had HR and HCM technology systems in place for years,” says Wes Muschara, Apex HCM’s Vice President of Product Management. “But we’re seeing that technology coming down market more and more to mid-market and small-market employers.”
Here are three top reasons you need HCM technology for your business and your payroll firm’s clients:
- Today’s tech-savvy employees expect it: A primary driver of HCM technology is the ability for employers to allow employees a customized degree of online, self-service access to a range of information and functions including viewing pay statements and tax documents; updating personal, emergency contact, banking and payroll tax information; electing or updating voluntary deductions; reporting time and requesting time off. Offering that kind of access is increasingly important for companies hiring Millennials.
“They’ve grown up as digital natives. They’ve always had a computer in their face, so they have the expectation that that’s going to exist in their workplace,” Muschara says. “Employees are almost like employers’ customers in that they’ve got to take care of their employees and those employees have a greater expectation of that consumer experience from their employer. They want to interact with their employer with that kind of capability.”
- It protects employers: Small businesses think about compliance as much as larger employers do. But they may not understand the myriad of state and federal laws or how they apply to their employees and businesses. That’s where offering proprietary HCM software to small and mid-sized businesses can prove invaluable. While the need may not be as complex as that of a larger employer, it’s still a critically important part of running a successful business – perhaps more so when you consider potentially devastating liabilities.
For a company that makes a legal misstep, “There’s always the headache of somebody reporting an issue to the Department of Labor or the Department of Revenue,” says Misty Blakesley, Apex HCM’s Director of Sales & Account Management. “Now, you’re dealing with a potential investigation. That takes time away from running a business, plus there are potential costs and fines if the complaints are validated.”
A common mistake among small businesses and their payroll and HCM managers or providers is failing to properly store certain employment and tax documents securely and for state- or federally-mandated periods of time. Statistics show that organizations that automate and integrate payroll with HCM functions including benefits administration, absence and leave and compliance reporting are seven percent less likely to have payroll errors.
“You need a technology that’s going to support and protect you as a payroll business and help support and protect your clients.”
- The right technology saves employers money, makes your payroll firm money: HCM services are “something that all small businesses think about but they may not have the budget to hire a fulltime or often even a part-time person to support them around the HR/HCM side,” Blakesley says.
Outsourcing payroll and HCM invariably saves businesses money over handling these critical functions inhouse. And if your payroll firm isn’t already offering HCM software and services as an added value, you’re missing out on an ever-growing and repeating revenue source.
“The more services your client needs, and the more you can offer, the stickier they are,” Blakesley says. “It drives revenue and improves client retention.”
Online, cloud-based payroll and HCM systems with role-based security and employee self-service features; a proprietary tax engine; and Affordable Care Act and other compliance tools are just a few offerings that will set your payroll services bureau apart from competition when approaching new clients and upselling existing clients. Call 877-750-2739 or request a demo of any of our payroll products or services.